"Within days, Donald Trump could potentially have his sprawling real estate business empire ordered ‘dissolved’ for repeated misrepresentations on financial statements to lenders, adding him to a short list of scam marketers, con artists and others who have been hit with the ultimate punishment for violating New York’s powerful anti-fraud law,” the AP reports.
“An Associated Press analysis of nearly 70 years of civil cases under the law showed that such a penalty has only been imposed a dozen previous times, and Trump’s case stands apart in a significant way: It’s the only big business found that was threatened with a shutdown without a showing of obvious victims and major losses.”
AP has been really pro-Trump the last several years. No victims? How is evading taxes victimless? We’re all paying for him.
There are multiple victims. First, as you say, there are the citizens of New York City and New York State. They have paid for the services that Trump’s empire there has utilized. His business could not exist without roads, utility lines, and all the other myriad services that taxes pay for. By not paying his fair share, the rest of the tax payers have had to subsidized his enterprise.
The other class of victim that rarely comes up is the banks themselves. Sure, the loans may have been repaid, well, except for that mysterious $48 million dollar loan that was forgiven. (By the way, how the hell do you get a bank to just up and forgive a $48 million dollar loan? Does that make any sense to anyone?) Anyway, my real point is that banks make profit from interest on loan repayment. The higher the risk of the loan, the higher the interest rate they charge. By falsifying the values of his properties, he was misleading the banks and getting more favorable interest rates than they would otherwise have given him. A bank that could have made a million dollars of interest on a given loan may only have made half a million because of his deception. I can’t really bring myself to feel sorry for a bank, but it does make them a victim of his crime.
The other victims are other people applying for loans. The banks might have been more inclined to give them loans, or give them loans at better interest rates, if their money wasn’t tied up in the loans they made to Trump’s business under false pretenses.
“If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.”
― J Paul Getty
Yeah, probably the whole explanation in a nutshell.
My assumption is Mystery loan was paid off by somebody or floated by somebody as a form of bribe or money laundering. You know. Somebody like Putin, or the Saudis or similar. or the bank themselves.
Yeah, it could be. He is alleged to have done that sort of thing but this seems a little different, I think. Deutsche Bank supposedly loaned Trump money, even when nobody else would. They sold the debt to Vnesheconombank, the Russian state development bank. The Russian bank would then just never make Trump pay it. Essentially giving him a big pile of money and never expecting it back. Deutsche Bank did wind up paying a $630 million fine for participating in Russian money laundering.
Sounds a bit like…{turns head left, then right, then center and whispers}…socialism.
The loan seems to be between himself and one of his companies, so a bank didn’t forget about the loan. The significance is that not accounting for this loan correctly may have allowed him to evade taxes because it changed the valuation of his assets.
Another way of thinking about possible victims is that the banks probably would have loaned that money to someone. If it was an honest person or company (or rather more honest), then that money may have been used to generate more taxes than we’re paid, more public benefit, or both. Of course the bank gets their profits, but they are in theory supposed to benefit everyone so long as the system is working (I know there are many ways in which it is not) but when someone cheats the system they take an undue amount of that benefit for themselves.
No, this was an actual lender forgiving $48 million in debt according to this article.
The bank forgave the $48 million dollar loan. When a bank forgives a loan, it has to be reported as income. Trump instead reported that his Chicago Unit Acquisition LLC actually loaned him $48 million and that he paid off the loan with it. Essentially, he claimed that the debt went from Fortress to Chicago Unit Acquisition and he still had the debt. He didn’t though, it had been forgiven. That’s tax fraud.
Edit: forgiving, not forging.
Thanks, I didn’t see that in the initial reporting
As far as lying to the banks its the equivalent of grabbing a box of lobster tails at the grocery store and ringing it up as bananas at the self checkout. Then when busted being like “What I paid something, its not like I just walked outta the store with them” Sorry there dollarama mussolini, thats called theft.